Tuesday, February 26, 2013

I read a fascinating story last week, entitled ‘How the Patent Office Helped to End Slavery’.
It has all the elements a good story needs – celebrity (Jefferson
Davis, the future Confederate president), adversity (the denial of the
rights of a slave, Benjamin Montgomery), conflict (the Union versus the
Confederate patent offices), and the triumph of good over evil
(emancipation, and victory of the Union patent laws).

In a nutshell, the question arose as to who ‘owned’ inventions made by
slaves, and was thus entitled to ownership of any resulting patent. It
will come as no surprise to learn that slave-owners, such as Jefferson
Davis’ brother Joseph, considered that they were entitled to the fruits
of the ingenuity of their human chattels.

However, the US Commissioner of Patents, Joseph Holt, disagreed. In
1857 he ruled, essentially, that since slaves had no legal rights, they
could not possess rights as inventors, and therefore they had no
recognisable intellectual property that could be transferred to their
owners. Since neither Jefferson nor Joseph Davis was the first and true
inventor of the improved riverboat propeller invented by Joseph’s slave
Benjamin Montgomery, and nor could they be the legitimate assignees of
any purported ‘rights’ to the invention (since no such rights ever
existed), the USPTO simply refused to grant patents to either one of the
brothers, or indeed to any other slaveholders who sought to claim
ownership of inventions devised by their slaves.

Although the Confederate enacted its own patent law which secured
ownership by slaveholders of inventions developed by their slaves, it
appears that no such patents were ever granted (and if they had been
granted, they would not have been in force for very long).

While ownership of inventions by slave owners is no longer an issue in
developed nations, the right of one party to claim ownership of an
invention made by another, remains very much a live issue. We are
fortunate that, nowadays, all free women and men are entitled, the the
first instance, to ownership of the products of their own ingenuity,
should they choose to capitalise on that right. However, it remains the
case that many inventions for which patent rights are sought are made
by employees in the course of employment, and are claimed as the
property of their employers.

But Employers are not Slave-Holders!

The big differences, of course, between ‘employment’ and ‘slavery’ are
that, as a general rule, modern employees enter into contracts of
employment of their own free will, are (hopefully) adequately
compensated for their physical and intellectual contributions, and are
entitled to terminate those contracts, on reasonable terms, at any
time. Employees continue to enjoy (in principle, at least) the same
individual rights as any other member of society. As a result, they are
entitled to ownership of their own inventions, and to freely-assign
those rights to any other party as they see fit.

However, rights to any invention made by an employee in the normal
course of their employment will generally accrue to the employer, who
has paid the employee a wage for the labour which resulted in the
invention. Failing this (or, additionally, by way of confirmation) the
employee inventor may execute an express assignment document
transferring the invention to the employer.

What the modern employer, and the nineteenth-century slave-holder have in common is that neither one of them automatically owns the rights to an invention made by another.

Rights in an Invention

Despite what you may have heard, the fundamental principle that rights
originate in the inventive activity of the individual inventor is no
different under the US law (with its traditional – though
shortly-to-be-revoked – ‘first-to-invent’ rule of patent-eligibility)
than under the laws of any other country. No matter where you go, if
you want to have a patent granted to you, you must be either:

the inventor of the new technology; or

a person (or corporation) able validly to claim that the inventor’s rights have been legally transferred to you.

The only difference between the ‘first-to-invent’ and ‘first-to-file’
regimes is that when an invention happens to be independently (and
coincidentally) invented by two different people, the first-to-invent
approach allows the patent to be granted to whomever devised the
invention first, while the first-to-file approach grants the patent to
whomever gets to the patent office first. No patent office in the
developed world grants valid patents to people who are not either
independent inventors of the claimed technology, or persons to whom they
have (directly or indirectly) assigned their rights.

The point of all this is that ownership of an invention by anyone other
than a person who is actually an independent inventor (i.e. did not
learn of the invention from someone else) is never an automatic right.
In the case of an employee, the contract of employment may define the
working conditions and expectations of the employee’s role, and specify
the ownership of any intellectual property developed in the course of
that role. If not, or if this ownership is unclear, it may be necessary
to clarify the situation by requesting that the employee sign a further
contract expressly assigning the invention, and any resulting patent
rights, to the employer. It may also be necessary to ensure that the
inventor has been adequately compensated for the transfer of rights to
the employer.

‘Entitlement’ in Australia

In Australia, a patent cannot be granted if the applicant has not filed a
statement, or ‘Notice of Entitlement’, setting out the basis for its
ownership of the invention, and its entitlement to hold the granted
patent. The Australian Patent Office generally accepts these
notifications on face value – it does not conduct any further enquiries
to verify the validity of the claim to ownership. The verification of
entitlement details, and the preparation and filing of the Notice of
Entitlement, are generally carried out by an Australian Patent Attorney,
so the Office perhaps has little reason to doubt the contents of the
Notice of Entitllement. The Attorney plays an important role here, in
ensuring that any resulting granted patent properly identifies the
inventors as well as the assignee, and is not vulnerable to subsequent
attack on the basis of fraud or lack of entitlement.

Under the Raising the Bar law reforms, which come into effect
on 15 April 2013, it will be necessary to furnish correct entitlement
details when requesting examination of an Australian patent application
(if this has not been done earlier). If you are working with an
Australian patent attorney, please therefore ensure that you provide
entitlement details at the earliest possible opportunity, to ensure that
the lack of these details when requesting examination does not cause
the application to lapse!

Conclusion

In free countries, we no longer have to worry about whether the inventor
has any rights to his or her inventions in the first place! The act of
invention creates potential rights accruing to all free persons, which
they may keep for themselves, or assign to another entity in exchange
for good and valuable consideration – whether that be a salary, a
royalty on future use of the invention, or an express assignment
transferring the rights to another individual or entity.

The take-home message, for all inventors, their employers, and/or any
other entities claiming to hold rights in an invention, is that
establishing a legal chain of title from an inventor to an ultimate
owner of the patent rights remains as important today as it was in
1857. Get it wrong, and you may not have a valid patent to enforce! At
least these days, it is not necessary to worry about whether an
inventor has any rights in an invention. All free persons have rights,
which they may exercise in any way they see fit, within the boundaries
permitted by the law.